Question 1

Which of the following is an example of a capital resource?

Accepted Answer

A)  redwood trees 
B)  unskilled labor 
C)  stocks and bonds 
D)  an oil rig 
A)  redwood trees 
B)  unskilled labor 
C)  stocks and bonds 
D)  an oil rig

Question 2

To obtain the greatest gains from trade,a country should specialize in and ____ those goods for which it has a comparative advantage and ____ those goods for which other countries have a comparative advantage.

Accepted Answer

A)  export; export 
B)  import; import 
C)  export; import 
D)  import; export 
A)  export; export 
B)  import; import 
C)  export; import 
D)  import; export

Question 3

Which of the following would be likely to raise your opportunity cost of attending a big basketball game this Sunday night?

Accepted Answer

A)  A friend calls you up and offers you free tickets to a concert by one of your favorite bands on Sunday night. 
B)  Your employer offered you double your usual wage to work this Sunday night. 
C)  Late Friday afternoon, your physics professor makes a surprise announcement that there will be a major exam on Monday morning. 
D)  All of the above would likely raise the opportunity cost of attending the game. 
A)  A friend calls you up and offers you free tickets to a concert by one of your favorite bands on Sunday night. 
B)  Your employer offered you double your usual wage to work this Sunday night. 
C)  Late Friday afternoon, your physics professor makes a surprise announcement that there will be a major exam on Monday morning. 
D)  All of the above would likely raise the opportunity cost of attending the game.

Question 4

Prices communicate information about relative availability of products.For example,a decrease in the price of corn signals to consumers and producers that:

Accepted Answer

A)  consumers are buying more corn than before. 
B)  corn is relatively more abundant than before. 
C)  corn is relatively less abundant than before. 
D)  consumers are stocking up on corn because of the predictions of a cold winter. 
A)  consumers are buying more corn than before. 
B)  corn is relatively more abundant than before. 
C)  corn is relatively less abundant than before. 
D)  consumers are stocking up on corn because of the predictions of a cold winter.

Question 5

Which of the following is not an example of a capital resource?

Accepted Answer

A)  the expertise of a computer programmer 
B)  a pitch fork 
C)  a commercial sewing machine 
D)  100 acres of farmland in central California 
A)  the expertise of a computer programmer 
B)  a pitch fork 
C)  a commercial sewing machine 
D)  100 acres of farmland in central California

Question 6

The marginal cost of a vacation in the south of France is $4,500.The marginal benefit to Druscilla of a vacation in the south of France is $4,800.

Accepted Answer

A)  Druscilla will lose $300 if she vacations in the south of France. 
B)  Druscilla will experience a net gain of $300 if she vacations in the south of France. 
C)  Druscilla will be worse off if she vacations in the south of France. 
D)  Druscilla will enjoy a net gain of $4,800 if she vacations in the south of France. 
A)  Druscilla will lose $300 if she vacations in the south of France. 
B)  Druscilla will experience a net gain of $300 if she vacations in the south of France. 
C)  Druscilla will be worse off if she vacations in the south of France. 
D)  Druscilla will enjoy a net gain of $4,800 if she vacations in the south of France.

Question 7

Which of the following would be categorized as capital resources for a college or university?

Accepted Answer

A)  water, trees, and the acreage a campus rests on 
B)  chalkboards, overhead projectors, and the expertise of professors 
C)  exams, fuel oil (which heats the buildings), and electricity 
D)  the work effort of registrars, clerical assistants, and teaching assistants 
A)  water, trees, and the acreage a campus rests on 
B)  chalkboards, overhead projectors, and the expertise of professors 
C)  exams, fuel oil (which heats the buildings), and electricity 
D)  the work effort of registrars, clerical assistants, and teaching assistants

Question 8

The opportunity cost of attending college is likely higher for a high school graduate who leaves a job grilling hamburgers than it is for a high school dropout who leaves a job working as a computer network administrator.

Accepted Answer

A) True 
 B)False

Question 9

If race-car driving is dangerous,why would any rational person choose to be a race-car driver?

Accepted Answer

A rational person might choose

Question 10

If a country wanted to maximize the value of its output,each job should be carried out by the person who:

Accepted Answer

A)  has the highest opportunity cost. 
B)  has a comparative advantage in that activity. 
C)  can complete the particular job most rapidly. 
D)  enjoys that job the least. 
A)  has the highest opportunity cost. 
B)  has a comparative advantage in that activity. 
C)  can complete the particular job most rapidly. 
D)  enjoys that job the least.

Question 11

According to the rule of rational choice,an individual will undertake an activity as long as:

Accepted Answer

A)  the expected marginal benefits are less than the expected marginal costs. 
B)  the expected marginal benefits are greater than the expected marginal costs. 
C)  total costs exceed total benefits. 
D)  total benefits exceed total costs. 
A)  the expected marginal benefits are less than the expected marginal costs. 
B)  the expected marginal benefits are greater than the expected marginal costs. 
C)  total costs exceed total benefits. 
D)  total benefits exceed total costs.

Question 12

Government price controls

Accepted Answer

A)  strip the market of its meaning for both buyers and sellers. 
B)  often impose harm on the same people they are trying to assist. 
C)  sometimes force prices above or below what they would be in a market economy. 
D)  all of the above 
A)  strip the market of its meaning for both buyers and sellers. 
B)  often impose harm on the same people they are trying to assist. 
C)  sometimes force prices above or below what they would be in a market economy. 
D)  all of the above

Question 13

The function of an entrepreneur is to:

Accepted Answer

A)  bear the business risks. 
B)  organize the other factors of production. 
C)  innovate. 
D)  do all of the above. 
A)  bear the business risks. 
B)  organize the other factors of production. 
C)  innovate. 
D)  do all of the above.

Question 14

Which of the following is true?

Accepted Answer

A)  Even intangible goods can be subjected to economic analysis. 
B)  Wealthy individuals who decide to donate money to charity face the constraints of scarcity. 
C)  Increases in production would not enable us to eliminate scarcity. 
D)  All of the above 
A)  Even intangible goods can be subjected to economic analysis. 
B)  Wealthy individuals who decide to donate money to charity face the constraints of scarcity. 
C)  Increases in production would not enable us to eliminate scarcity. 
D)  All of the above

Question 15

If scarcity was not a fact,

Accepted Answer

A)  people could have all they wanted of goods and services for free. 
B)  it would no longer be necessary to make choices. 
C)  poverty, defined as the lack of a minimum level of consumption would also be eliminated. 
D)  all of the above would be true. 
A)  people could have all they wanted of goods and services for free. 
B)  it would no longer be necessary to make choices. 
C)  poverty, defined as the lack of a minimum level of consumption would also be eliminated. 
D)  all of the above would be true.

Question 16

Which of the following is true?

Accepted Answer

A)  As long as human wants exceed available resources, scarcity will exist. 
B)  Scarcity ultimately leads to competition for the available goods and services. 
C)  Scarcity affects everyone to the same degree. 
D)  Both a. and b. are true. 
A)  As long as human wants exceed available resources, scarcity will exist. 
B)  Scarcity ultimately leads to competition for the available goods and services. 
C)  Scarcity affects everyone to the same degree. 
D)  Both a. and b. are true.

Question 17

How do price controls undermine the market as a communication device?

Accepted Answer

The imposition of price contro

Question 18

Which of the following is likely to provide teenagers with the greatest incentive not to smoke?

Accepted Answer

A)  public service television advertisement featuring Jennifer Lopez urging kids to refrain from smoking 
B)  a $2.00 per-pack tax on cigarettes 
C)  citing moral grounds, Leonardo DiCaprio refuses to play any part in which he will be seen smoking 
D)  a law prohibits anyone from smoking in public buildings 
A)  public service television advertisement featuring Jennifer Lopez urging kids to refrain from smoking 
B)  a $2.00 per-pack tax on cigarettes 
C)  citing moral grounds, Leonardo DiCaprio refuses to play any part in which he will be seen smoking 
D)  a law prohibits anyone from smoking in public buildings

Question 19

Negative incentives:

Accepted Answer

A)  increase benefits or reduce costs. 
B)  increase behaviors. 
C)  decrease benefits or increase costs. 
D)  include both cash subsidies and taxes. 
A)  increase benefits or reduce costs. 
B)  increase behaviors. 
C)  decrease benefits or increase costs. 
D)  include both cash subsidies and taxes.

Question 20

"Opportunity cost" refers to:

Accepted Answer

A)  the dollar price paid for a good. 
B)  the value of the best foregone alternative. 
C)  the finder's fee paid to a job placement agency for locating employment for workers. 
D)  the membership fee paid to join a health club. 
A)  the dollar price paid for a good. 
B)  the value of the best foregone alternative. 
C)  the finder's fee paid to a job placement agency for locating employment for workers. 
D)  the membership fee paid to join a health club.

Exam 2: Economics: Eight Powerful Ideas

Which of the following is an example of a capital resource?

To obtain the greatest gains from trade,a country should specialize in and ____ those goods for which it has a comparative advantage and ____ those goods for which other countries have a comparative advantage.

Which of the following would be likely to raise your opportunity cost of attending a big basketball game this Sunday night?

Prices communicate information about relative availability of products.For example,a decrease in the price of corn signals to consumers and producers that:

Which of the following is not an example of a capital resource?

The marginal cost of a vacation in the south of France is $4,500.The marginal benefit to Druscilla of a vacation in the south of France is $4,800.

Which of the following would be categorized as capital resources for a college or university?

The opportunity cost of attending college is likely higher for a high school graduate who leaves a job grilling hamburgers than it is for a high school dropout who leaves a job working as a computer network administrator.

If race-car driving is dangerous,why would any rational person choose to be a race-car driver?

If a country wanted to maximize the value of its output,each job should be carried out by the person who:

According to the rule of rational choice,an individual will undertake an activity as long as:

Government price controls

The function of an entrepreneur is to:

Which of the following is true?

If scarcity was not a fact,

Which of the following is true?

How do price controls undermine the market as a communication device?

Which of the following is likely to provide teenagers with the greatest incentive not to smoke?

Negative incentives:

"Opportunity cost" refers to:

The Role and Method of Economics

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty, and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

Filters

To obtain the greatest gains from trade,a country should specialize in and those goods for which it has a comparative advantage and those goods for which other countries have a comparative advantage.